Government plans to allow building on woods and other green places, in return for new space for wildlife elsewhere, have come under greater scrutiny after a scheme in Australia that had been cited by environment secretary Owen Paterson as evidence in favour of the move was branded "disappointing" by a leading expert there.

Two sources informed the Guardian that the plan was due to be announced within weeks, although the Department for Environment, Food and Rural Affairs (Defra) says it has not yet decided on a timescale. Because six offsetting pilot projects begun in Britain in 2012 are not completed, the government has justified its controversial proposals by drawing on the Australian experience of offsetting, which started in 2002 and is employed in several states.

"What is fascinating about the Australian example is that is has already changed people's behaviour," Paterson told the Commons environmental audit committee last year, after a visit to Australia. He added: "One of the interesting lessons from Australia was that there has been an 80% reduction in applications to build on grassland."

But Dr Philip Gibbons, biodiversity conservation researcher at the Australian National University, who has advised two Australian state governments and the International Union for the Conservation of Nature, has told the Guardian that deforestation had increased in one state after offsetting and that Australia does not yet know if the policy has been successful.

In email correspondence, Gibbons said: "I am very disappointed with the gap between the principles of biodiversity offsetting and practice. The science indicates that it is not feasible in the majority of circumstances to destroy biodiversity at site A and simply reinstate it at site B. Thus, to achieve no net loss of biodiversity in Australia, we must be prepared to constrain development to those sites where biodiversity can genuinely be offset – which means reducing the area available for development. Governments in Australia are reluctant to do this."

He added: "Biodiversity offsets have not been audited effectively in any Australian jurisdiction, so the Australian community does not know whether this policy has delivered its intended aim."

Last autumn, MPs on the environmental audit committee concluded in a report on biodiversity offsetting that it "could improve the way our planning system accounts for the damage developments do to wildlife, if it is done well … But ministers must take great care to get offsetting right." It also called for the six pilot schemes to be allowed to run their course.

Sandra Bell, nature campaigner at Friends of the Earth, said: "The political agenda in the UK is very clearly about using offsetting as way of speeding up the planning process and allowing more intensive development in certain areas with offsets located in areas where land is cheaper. This is no secret as there are references to 'increasing net developable area' and 'increasing the land available for development' and to 'unblocking' larger housing developments in government documents. The government should pull the plug on these madcap 'offsetting' plans and get on with delivering its commitments to protect and boost wildlife through better planning."

A spokesperson for Defra said: "Defra is currently considering options in light of feedback from our public consultation on biodiversity offsetting in England, as well as the environmental audit committee's report and evidence from the six offsetting pilots. No decision has been taken and there are currently no plans to announce any details on this."

Technical, legal and financial problems with biodiversity offsetting are identified in a new review of offsetting projects being developed in mainland Europe, the US and Canada. "Some countries, such as the UK, have opted to lower costs and speed up the system by choosing a highly simplified methodology that only gives a very general view of the biological diversity of a particular site. This leads to policies such as allowing developers to offset with a different kind of biodiversity to that destroyed," says the paper, commissioned by the Institute for European Environmental Policy.

It adds: "Measuring biodiversity is almost impossible to do accurately and is prohibitively expensive. Offsets provide no certainty as to their final outcome, and what little reporting is done shows that offsets more often than not provide 'equivalent biodiversity' that is grossly inferior to that which was destroyed. This will lead to a net loss of biodiversity."

"Offsetting will not tackle biodiversity loss, but may impoverish communities. Its introduction allows, or even encourages, environmental destruction with the promise that the habitat can be recreated elsewhere. This is beneficial to the companies doing the damage, since they can present themselves as a company that invests in environmental protection, thereby greenwashing its products and services. It only serves to permit the commodification of nature," it says.